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Two-product storage-capacitated inventory systems: A technical note

Author

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  • Beemsterboer, Bart
  • Teunter, Ruud
  • Riezebos, Jan

Abstract

This paper considers a two-product inventory model with limited storage capacity and constant demand rates. We aim at finding an ordering policy that minimizes the cost per time unit. In the literature, several solution methods have been developed for this problem, but these are limited to very restrictive classes of policies. We consider a much more general class where the order quantity of one of the products is allowed to vary. These policies are still cyclic and easy to implement. Closed-form expressions are derived for determining the optimal order quantities. It is shown that savings of up to 25% are possible compared to existing approaches.

Suggested Citation

  • Beemsterboer, Bart & Teunter, Ruud & Riezebos, Jan, 2016. "Two-product storage-capacitated inventory systems: A technical note," International Journal of Production Economics, Elsevier, vol. 176(C), pages 92-97.
    • Handle: RePEc:eee:proeco:v:176:y:2016:i:c:p:92-97
    DOI: 10.1016/j.ijpe.2016.03.015
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    References listed on IDEAS

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    1. Boctor, Fayez F., 2010. "Offsetting inventory replenishment cycles to minimize storage space," European Journal of Operational Research, Elsevier, vol. 203(2), pages 321-325, June.
    2. Murthy, Nagesh N. & Benton, W. C. & Rubin, Paul A., 2003. "Offsetting inventory cycles of items sharing storage," European Journal of Operational Research, Elsevier, vol. 150(2), pages 304-319, October.
    3. Klaus Zoller, 1977. "Deterministic Multi-Item Inventory Systems with Limited Capacity," Management Science, INFORMS, vol. 24(4), pages 451-455, December.
    4. Guillermo Gallego & Maurice Queyranne & David Simchi-Levi, 1996. "Single Resource Multi-Item Inventory Systems," Operations Research, INFORMS, vol. 44(4), pages 580-595, August.
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